This week David Elkins (Netanya, visiting Cincinnati) reviews Luís Calderón Gómez (Cardozo), Envy, 113 Va. L. Rev. _ (forthcoming 2027):

In this week’s feature article, Professor Luís Calderón Gómez makes a provocative but carefully framed argument: if legal analysis takes welfare seriously, it cannot simply ignore envy because envy is morally unattractive. The article does not defend envy as a virtue. Rather, it argues that envy is a pervasive psychological phenomenon that produces real welfare losses, and that a genuinely welfarist approach should therefore take those losses into account.

Calderón Gómez uses “envy” broadly to include what economists often describe as negative interdependent preferences, relative preferences, or positional concerns: the phenomenon in which a person’s welfare depends negatively on another person’s superior income, consumption, or status. The important point is that people do not evaluate their position in purely absolute terms. They compare themselves with others, and those comparisons can reduce welfare.

This creates a problem for conventional welfarism. Welfarist analysis ordinarily purports to take people’s preferences as they are. Yet legal and economic scholarship has often been willing to incorporate emotions such as altruism, guilt, and shame while treating envy as something that may simply be excluded from the welfare calculus. Calderón Gómez argues that this is difficult to justify on welfarist grounds. If envy causes real welfare losses, its moral unattractiveness does not by itself make those losses disappear.

The article then explores the implications for tax policy. The first is familiar but important: envy strengthens the case for progressive taxation. Traditional arguments for redistribution often rely on declining marginal utility—the idea that an additional dollar produces more welfare for a poor person than for a rich person. Envy supplies a distinct argument. If inequality itself produces welfare losses because people care about their relative position, reducing inequality can generate welfare gains apart from the increased utility received by transfer recipients. Calderón Gómez draws on both older models of interdependent preferences and more recent empirical evidence suggesting that relative income and inequality materially affect well-being.

But the Article does not stop at the conclusion that envy supports greater income-tax progressivity. It asks what people actually envy. The empirical evidence, Calderón Gómez argues, suggests that social comparison is especially strong with respect to visible or positional consumption. People compare incomes and wealth, but conspicuous consumption—cars, housing, clothing, jewelry, and other status goods—may be particularly effective at generating envy.

That insight complicates the traditional income-versus-consumption-tax debate. If visible consumption is an especially important source of envy, then consumption taxation may be better targeted at this particular welfare cost than income or wealth taxation. Even more significantly, Calderón Gómez argues that envy undermines the conventional preference for uniform consumption taxation. Standard tax theory generally disfavors luxury taxes because differential commodity taxation distorts consumer choice and because redistribution can supposedly be accomplished more efficiently through the income tax. But if certain forms of consumption themselves generate a negative externality, differential taxation may be corrective rather than merely distortionary. A tax on conspicuous or highly positional consumption begins to look like a Pigouvian tax: its purpose is to make consumers internalize the welfare costs their consumption imposes on others. On that account, the reduction in conspicuous consumption is not an unfortunate side effect of the tax; it is part of the point.

The Article’s third major tax argument concerns the geographic scope of redistribution. Conventional fiscal-federalism theory generally favors national rather than state or local redistribution because wealthy taxpayers can more easily leave a high-tax locality than leave the country. Gómez argues that this overlooks an important feature of envy: social comparisons are often local. People tend to compare themselves especially with neighbors, coworkers, friends, and others who are socially or geographically proximate. If so, reducing local inequality may produce welfare gains that equivalent national redistribution does not. The result is not that redistribution should necessarily be localized, but that the standard presumption in favor of national redistribution is incomplete.

Calderón Gómez’s insightful analysis proceeds from his central claim that the moral attractiveness of envy is irrelevant to welfare analysis, and that, if welfarists are to remain true to the doctrine of preference neutrality, they must recognize and account for the welfare impact of envy. While Calderón Gómez devotes considerable attention to this claim and defends it admirably, I could not help recalling the rather different conclusion Dworkin reached when considering the implications of preferences concerning the treatment of others. For example, in a racist society, taking all preferences at face value might permit the preferences of a prejudiced majority to outweigh the welfare losses imposed on a racial minority. One possible response would be simply to refuse to count racist preferences because racism is morally reprehensible. Dworkin chose a slightly different path. He distinguished between personal preferences concerning one’s own allocation of goods or opportunities and “external preferences” concerning their allocation to others, arguing that the latter should not be allowed to determine another person’s entitlements because doing so would make those entitlements depend upon the esteem or contempt in which others hold that person.

True, Dworkin’s distinction may not map perfectly onto envy: the welfare loss suffered by an envious person can plausibly be characterized as personal, even though it results from another person’s circumstances. Nevertheless, the problem he identified illustrates the difficulty with a welfare function that takes account of any and all preferences simply because they exist. One might distinguish envy from racist preferences on the ground that envy is not morally reprehensible and may even constitute a legitimate response to perceived inequality. Perhaps, but that argument would implicitly concede the central point at issue: welfarism cannot in fact remain neutral among all preferences. If the reason for counting envy depends upon its moral acceptability, then its moral attractiveness is not, after all, irrelevant to welfare analysis.

Whatever the ultimate resolution of that normative question, I have no doubt that the Article constitutes an important contribution to the literature. If we do take envy into account in our welfare analysis, Calderón Gómez demonstrates that we may be pushed toward policies that depart sharply from conventional law-and-economics conclusions.

Here is the rest of this week’s SSRN Tax Roundup:

Joseph Berglund (Indiana), Controlling Calamity: Avoiding the Economic Implications of a Constitutional Realization Requirement (May 15, 2026)

Ki-Soon Choi (Boston College), Xintong Li (Boston College) & Benjamin Yost (Boston College), ETF Tax Efficiency and Firm Payout Policy (Aug. 20, 2026)

Bridget J. Crawford (Pace) & Jonathan G. Blattmachr (Milbank LLP), Wrongfully Incarcerated, Wrongfully Taxed (Aug. 15, 2026)

Hilary G. Escajeda (Mississippi Coll.), Taylor Swift, Tortured Poets, and the Tax Code’s Frankenstein, 125 Colum. L. Rev. F. 75 (2025)

Lyla Latif (U. Nairobi), A Decolonial Feminist Intervention on Tax, Maize, and the Right to Eat on Our Own Terms (Oct. 1, 2025)

Wen Yi Leong (Peking U.), Jurisdictional Assignment Functions: Comparing Competing Situs Rules in the Taxation of Digital Assets (2026)

Daniel Malbasic (Bulg. Acad. Sci.), Substance Without a Directive: Residence, Permanent Establishment and the Withdrawal of ATAD 3 as They Apply to Owner-Managed Companies (June 11, 2026)

Daniel Malbasic (Bulg. Acad. Sci.), The Threshold That Binds First: Value Added Tax Registration Sequencing for Owner-Managed Companies in Bulgaria, 2026 (Aug. 10, 2026)

Maria Francesca Ricci (U. Foggia), Elisabetta Mafrolla (U. Foggia) & Eugenio D’Amico (U. Rome III), Money for Nothing? Crypto Holding and the Disclosure of Unrecognised Tax Losses (Aug. 25, 2026)

Yuanzhen Zhang (Fudan U.), Chenkai Ni (Fudan U.), Oliver Zhen Li (Nat’l U. Singapore) & Jinping Zhang (Fudan U.), Common Reporting Standard and Corporate Investments—Evidence from Firms with Concentrated Ownership (Aug. 21, 2026)